What is a false positive when you’re talking about credit card transactions? Simply stated, it is when a GOOD transaction (order) is rejected by either the issuer or the merchant, due to suspected fraud.
According to a Javelin study, over 33 million people – or 15% of all cardholders - experienced a transaction that was falsely declined in 2014. These false positive declines totaled $118 billion in lost sales to merchants. This is both frustrating and costly to merchants, who are losing out on sales and returning buyers. Approximately 66% of the purchases that are lost are over $100 in value, and 40% of declines were over $250. It’s equally frustrating to the issuers, who are losing out on the interchange fees and the possibility that the consumer will stop using that card in the future.
This is a huge problem. Almost 40% of consumers stopped using the card that was declined (or stopped shopping at the merchant), and an additional 25% decreased usage of that card. Regardless of which party was at fault for the false positive, strategies to decrease false positives will increase your sales, reduce consumer insults and increase consumer loyalty. We’ll talk more about strategies to reduce false positives later in the month
With your One Connection™ to Cardinal, we can help reduce your false positives, to FutureProof™ your business.